New orders for durable goods in January were down 0.2% from December, a smaller than expected decline. December was revised higher to up 2.9% (previously up 2.4%). The data was restrained by a 2.2% decrease in transportation orders which was down 0.8% for motor vehicles and 19.6% for defense aircraft. The component for nondefense aircraft jumped 346.2% which hardly seems credible after Boeing reported no new orders for the month. I suspect that seasonal adjustment factors were not well matched for this period when orders are typically soft — but not that soft — after an expected bump up at year-end which didn’t occur in 2019. Excluding transportation, orders were up 0.9%.
Outside of transportation, orders were solid for primary metals (up 2.2%), machinery (up 2.1%), fabricated metal products (up 1.2%), and computers (up 8.0%). This is consistent with surveys of manufacturing that pointed to renewed activity due to firming in orders.
So-called “core” new orders — orders excluding civilian aircraft capital goods and defense capital goods — orders were down 0.1%. The decline was negligible and came on the heels of two months of decent increases.
Unfilled orders were flat for a second month in a row in January, in part on lack of orders in aircraft to build up the backlogs. Shipments were down 0.2% in January, reflecting earlier weakness in new orders. Inventories were flat as businesses remained cautious about allowing stocks to accumulate.
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